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03 February 2012 00:29

Did capitalism fail and did the cow jump over the moon?

Eustace Davie explains why he thinks capitalism has not failed.

Children know instinctively that fables and nursery rhymes, such as this one from Mother Goose’s Melody, are not intended to be taken seriously. There are adults, however, who go on unthinkingly reciting fables about “the failure of capitalism”.

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01 February 2012 03:40

The 'hopeless continent' gets a second wind

Decades of decline have been reversed in a growing number of countries.

More than half a century after the first, a second wind of change is blowing through the continent. A recent issue of The Economist said that ‘after decades of slow growth, Africa has a real chance to follow in the footsteps of Asia’.

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30 January 2012 09:01

Twitter’s censorship is a gray box of shame

...but not for Twitter.

Twitter’s announcement this week that it was going to enable country-specific censorship of posts is arousing fury around the Internet. Commentators, activists, protesters and netizens have said it’s “very bad news” and claim to be “#outraged”. Bianca Jagger, for one, asked how to go about boycotting Twitter, on Twitter, according to the New York Times. (Step one might be… well, never mind.) The critics have settled on #TwitterBlackout: all day on Saturday the 28th, they promised to not tweet, as a show of protest and solidarity with those who might be censored.

Here’s the thing: Like Twitter itself, it’s time for the Internet, and its chirping classes, to grow up. Twitter’s policy and its transparency pledge with the censorship watchdog Chilling Effects is the most thoughtful, honest and realistic policy to come out of a technology company in a long time. Even an unsympathetic reading of the new censorship policy bears that out.

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27 January 2012 11:54

SA banks … it’s all about the balance sheet!

Revenue drivers, expense growth and margins are the major drivers of profitability.

I remember in 1997 having various debates with some of my colleagues on what an appropriate rating for SA banks would be. At that time some market participants held the view that our banks had “defensive” qualities and that they deserved a premium rating relative to other SA equities because of their superior earnings growth track record and prospects.

Certainly, if you simplistically compare the business of a bank to that of a local industrial company, you could argue along those lines. Revenue drivers, expense growth and margins are the major drivers of profitability. Revenue drivers are arguably somewhat different but the basics of operating leverage (growing revenue faster than costs) remains the most important factor in growing the bottom line.

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27 January 2012 05:07

Modern monetary theory and the global financial crisis

It has become increasingly clear that orthodox macroeconomics is flawed.

As the global financial crisis enters its fifth year it has become increasingly clear that orthodox macroeconomics is flawed. It failed to anticipate and prevent the global financial crisis and it has failed to provide suitable remedies.

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